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WAEC Commerce 1999 Question 49

Question 49

Insurance

Mr. Ajai did not disclose that he stores drums of petrol when he took a fire insurance policy. Under which of the following principles will be insurance company reject his claims?

  1. A.Subrogation
  2. B.Utmost good faith
  3. C.Insurable interest
  4. D.Proximate cause
Show the answer and explanation

Answer: B (Utmost good faith)

Explanation

Hiding a material fact such as stored petrol breaks the duty of utmost good faith.